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“The President and his allies cannot hold important programs hostage to their personal whims and political ideologies, destabilizing the country by taking away essential federal funding already given to the states.”
Russell Vaught, acting director of the Office of Management and Budget, testifies before the semiannual report of the House Finance Committee on the Consumer Financial Protection Bureau (CFPB), on Capitol Hill in Washington, Wednesday, July 15, 2026. (AP Photo/Cliff Owen) AP
BOSTON (AP) — A federal judge in Boston ruled Friday that the Trump administration cannot use an obscure provision related to the agency’s priorities to reap billions of dollars in funding cuts.
Twenty-three states filed a lawsuit last year accusing the administration of using the provision to make cuts to everything from crime prevention to food security. Scientific research. They were concerned that it would be used to void current and future grants.
U.S. District Judge Indira Talwani issued a summary judgment barring the administration from relying on the provision to make the cuts and denied a request from the government to dismiss the case.
“Defendants’ interpretation of the termination provision is clearly unsupported by the text of the provision, is inconsistent with the regulatory scheme, has no support at the date of the rulemaking, and violates the requirements of the Expenditure Clause by unambiguously imposing conditions,” Talwani, who was nominated by Democratic President Barack Obama, wrote.
The suit argued that the Office of Management and Budget issued the use of the provision in question to justify what it described as a “nationwide slash-and-burn campaign.”
The provision, which was first introduced in 2020 and revised in 2024, states that federal agents can terminate an award if the award no longer “advances program objectives or agency priorities.” The states argued that the language, which was put in place during the Biden administration, was first used to terminate the grants.
“Instead of working with us to keep the public safe and reduce costs for hardworking New Jerseyans, the Trump administration recklessly and unlawfully eliminated federal funding for public safety, disaster preparedness, scientific research, clean water, and more,” New Jersey Attorney General Jennifer Davenport said in a statement.
“Today’s decision is an important win for all New Jerseyans and confirms that the Trump administration defied the law when it embarked on its campaign to cut critical federal funding to states,” she continued. “The President and his allies cannot hold important programs hostage to their personal whims and political ideologies, destabilizing the country by taking away essential federal funding already given to the states.”
Federal government lawyers called the case “an extraordinarily unusual lawsuit” and argued that it should be dismissed because some of those grants had already been terminated, and the plaintiffs’ argument about its impact on future grants was highly speculative. They also accused states of “raising blanket and undifferentiated objections” to terminating thousands of grants without seeking relief that would “restore a single grant.”
“The mismatch between the agency’s allegedly unlawful ‘decision’, on the one hand, and the amorphous relief sought in this lawsuit, on the other, creates a set of jurisdictional and justiciability flaws that doom this lawsuit to the threshold,” the lawyers wrote in the motion to dismiss.
A spokesperson for the Office of Management and Budget did not respond to a request for comment.